Firms face pressure to stay in black
Industrial enterprises witness slowing growth amid profitability headwinds
Profit growth among China’s major industrial firms slowed in September, leading to a weaker 14.7 percent yearon-year profit expansion from January to September, down 1.5 percentage points compared with the first eight months, analysts said.
They added that enterprises will continue to face heavy profit headwinds in the fourth quarter, although the overall economy remains on track.
In September alone, yearon-year profit growth of industrial firms was 4.1 percent, down from 9.2 percent in August, the National Bureau of Statistics said on Saturday.
Major industrial firms, or above-scale enterprises, are those with over 20 million yuan ($2.9 million) in annual sales revenue.
The weak September data was mainly driven by a pullback in product prices as well as a high comparative base from last year, NBS official He Ping said in a statement.
But the efficiency of major industrial firms improved with higher profitability and lower costs, according NBS data.
Although industrial profits rose at a slower pace, industrial companies’ operating costs and leverage ratios both fell, while their profitability continued to improve, He said.